Direct Marketing Strategy: Direct Mail Testing

Posted on by Bryan.Formhals

Author: Maggie Stack, Account Director

At least once a week, while doing homework, one of my kids will say “when will I ever use this in real life?” I like to point out to them how often I use my Algebra skills, but I never thought I would use science in my marketing career. As my colleague, Alan Sherman, mentioned in a previous blog, we use direct mail testing to determine the best direct marketing strategy. This is where science comes in. By following the steps of the scientific method with a continuous improvement mindset, we aim to exceed our clients’ marketing goals.

Purpose

When thinking about our clients’ direct marketing strategy, our question is always how can we improve results. The exact Key Performance Indicator (KPI) we are trying to improve varies by client, but it always means a better Return on Marketing Investment (ROMI).

Research

We start by reviewing current marketing efforts. Who is the target audience? What motivates them to respond? What tactics are currently being used? How do those tactics work together?

Hypothesis

Once our research is complete, we make recommendations for the elements or options we believe will improve results. Sometimes this is the choice to reduce the cost of a campaign while maintaining response and sometimes it is a higher cost option that will improve response. This could be a new data source, a new offer positioning, a new direct mail format, or addition of a complimentary digital tactic. In direct marketing, the options are truly endless. Once we decide on what will be tested, we can begin the experiment!

Experiment

The two most commonly used experiments in direct mail testing are a split test and a multivariate test. Split tests, or A/B tests, involve testing the same package except for the specific element to be tested. Multivariate testing involves testing multiple elements at the same time. The right one to use is based on several factors: budget, available quantity, quantity needed for the result to be statistically significant, and the number of items we want to test. Once the experiment is in the hands of the prospects, we wait for results.

Analyze Data

Depending on what we are measuring, results could take months to gather. There must be enough responders to be confident in the results. Analysis comes in the form of charts and graphs. Our goal is to always improve results, but sometimes we learn what does not work. As my high school science teacher would say after a failed experiment, “if you learned something, the experiment wasn’t wasted.” In direct marketing, the win in a losing test is that it leads to better, more refined hypotheses.

Conclusion

While there is a conclusion to every individual experiment, direct mail testing should never end.  We believe marketers should always be striving to improve their data, improve their messaging, and improve the tactics they use. And we love partnering with those that feel that same. Looking to apply a little bit of the scientific method to your direct marketing strategy? We are here to help.

Bio: Maggie Stack is an Account Director with over 20 years of experience in marketing services and direct mail production. When she isn’t discussing data and creative with her clients, you can find her and her husband cheering on their children in hockey, baseball, and dance.

The Importance of Data in Direct Mail Marketing

Posted on by Bryan.Formhals

Author: Alan Sherman, VP of Marketing Strategy

Quite often, when we work with clients in direct mail marketing, creative development is the first focus. But, just as in any marketing channel, who we target is just as important, if not more so for driving increased direct mail response and a successful direct mail campaign. For a full-service direct marketing company like Nahan, using data in direct mail marketing is a crucial component of an integrated success chain that includes strategy, data, creative and production execution.

Direct mail provides more data points to target against than any other marketing channel. The typical national data compiler manages over three thousand data points per person.*  Combine a multi-sourced wealth of data with sophisticated predictive analytics, and we can precisely rank prospects based on their propensity to respond (or other desired outcomes).

Let us take a look at typical data used by various direct mail industry clients. In the interest of time and space, what follows is not an exhaustive list.

Financial Services and Insurance – Credit Data

For financial and insurance clients, we see widespread use of credit bureau prescreened data – both in terms of trigger (credit or insurance inquiries by consumers) and broad market (often dictated by credit score and other data points) campaigns.

As a direct marketing service provider, Nahan partners with credit data agents, which can provide unique sources of value. Credit data agents typically receive and maintain real-time data from all 3 main credit bureaus, providing a comprehensive picture of all credit behavior across bureaus. More data across all 3 bureaus means more net qualified names, typically 15-20% more, and improved credit decisioning.

It also means more flexibility in terms of FCRA regulations, allowing for counts to be more easily run before actually pulling a file. Typically, when one pulls a complete prescreened credit file, one is obligated to make everyone on that list a firm offer of credit. Credit data agents have more flexibility in this regard. Custom models can make use of both credit and non-credit data for increased predictive power.

While credit data is usually the go-to data source for most financial and insurance acquisition mailers, it can often be supplemented by Invitation to Apply (ITA) data, which is primarily driven by a lifecycle event – such as college graduation, marriage, having children and buying a home. While ITA prospects are typically not as responsive, it is less expensive, and can be tested and paired with credit data as an effective supplemental data source.

Multiple Industries – Modeled Compiled Data

Compiled data is just that – data compiled from multiple sources and then linked to individuals and households. It’s typically used in travel, healthcare, retail, telecom, and auto direct mail.  There are a number of medium and large-sized data compilers that we partner with to provide the best data for our clients. Compiled data typically includes demographic, psychographic, and attitudinal data. 

Demographic data includes data elements like age, gender, income, occupation, and more.

Psychographic data is focused upon people’s interests and hobbies, often obtained via surveys, donations, and specialty lists.

Attitudinal data reflects attitudes and belief systems, typically from surveys and donations made to non-profits.

Compiled data is best paired with predictive analytics to identify the data elements that will give the greatest response.

Catalogers, Non-Profits, E-tailors and Others – Cooperative (Co-op) Data

Co-op data is customer purchase data collected from thousands of co-op members and maintained in a database. Typically, a member marketer must provide their customer data on a regular basis to join and participate. Co-op members include companies from the catalog, retail, etail, continuity, non-profit, publishers, finance, insurance, and business-to-business industries. Some co-ops focus on non-profit donation behavior specifically.

Co-ops collect over 1500 data elements for a given household and cover 190MM U.S. consumers. The depth and granularity of the data can vary by co-op. Given that customer behavior is often the most predictive of future behavior, this data is very powerful in its ability to predict the future response and purchasing.

Using marketer-provided customer purchase data, the co-ops use predictive models to find prospects elsewhere in the database with similar product and purchase behavior. Co-op data has long been a go-to data source for catalogers, replacing many of the more expensive specialty, “vertical” lists that exist, such as magazine subscriber files.

Business-to-Business (B2B) Data

B2B direct mail data used to come from two main data sources – Data Axle (formerly InfoGroup) and Dun & Bradstreet. They are still major players providing excellent data. Both, along with a continual flow of new players, now offer much more than the traditional data points like annual sales, number of employees, SIC code, and NAIC Code. Data points such as B2B buying behavior, public filings and linked consumer information all provide additional targeting insights. Because people change jobs much more frequently than they change addresses, B2B data is more challenging and labor intensive to maintain and keep up to date, resulting in a higher cost.

The Role of Analytics

The performance of all data mentioned here can and should be enhanced by predictive analytics. We simply can’t leverage any of these types of data to their full potential without the use of modeling to prioritize prospects. While a predictive model adds to the cost, it usually pays for itself in the first direct mail campaign with the increased direct response it produces. Depending on the circumstances, the model can be re-used until market conditions change. Machine learning and artificial intelligence have sped up the modeling process, and in certain cases, such as co-op data or credit models, new models may be built with every direct marketing campaign.

Our Data Role

Nahan has deep and long-time relationships with many types of direct mail data providers and list brokers. We can determine which source is the right fit for our clients’ objectives. Typically at a lower cost than our clients can obtain on their own. Our expertise ensures the best possible data at the best possible price. For any questions about data, please feel free to reach out to me at alan.sherman@nahan.com.

*Source: WebFX

Bio: Alan Sherman is our Vice President of Marketing Strategy. Alan enhances Nahan’s current value proposition with strategy solutions that support new/existing client relationships. For clients, he leverages market, customer, and competitive intelligence to build achievable strategies for omnichannel marketing success. His marketing plan strategies include targeted data, predictive analytics, testing and creative that drive ongoing client performance improvement. In his spare time, Alan enjoys spending time with his family, traveling, going to concerts, watching sports (he’s a fan of the NY Giants, Boston Red Sox and Celtics) and walking the dog, even though it was just out.

5 Advantages of Working with Nahan as a Direct Marketing Agency

Posted on by Bryan.Formhals

Author: Melissa Fransen

We have many exciting things happening at Nahan!

In January, we announced an expansion of our services to include a full omnichannel suite of direct marketing services, including strategy, creative, data, analytics, and more! These new services are being offered as needed a la cart style or in a fully integrated approach. Where you need help, our team can plug in and bring our expertise to take your direct marketing initiatives to new performance levels.

For many of our customers, our business relationship will remain unchanged and we are proud to continue our relationship as a trusted print partner. For others, these new resources bring forth a whole new world of opportunity.

Our team has been thrilled with the buzz we’ve been getting in the marketplace regarding our new services and the excitement we’re hearing from our customers. We want to say thank you for all of the questions we have received thus far. Keep the inquiries coming!

Here are 5 advantages of working with Nahan as a Direct Marketing Agency.

1. We Are Direct Marketing Strategy Experts

For over 50 years, Nahan has been known as a world-class printer. We know direct marketing production inside and out. We know best practices, what works, postal efficiencies, and much more. With our strategy offering, we can work with your team to optimize your entire direct marketing strategy and/or plug in where needed. Here are some examples of topics you could expect us to cover and ultimately address:

  • Discussion of your current direct marketing go-to-market strategy
  • Understanding your top-line goals and provide recommendations for helping you achieve and exceed them
  • What do successful KPIs look like for you?
  • Introduction of omnichannel and integrated tools to provide incremental response and lowered cost per acquisition
  • What is your data strategy?
  • How we leverage a test and learn approach with data and creative to continually improve results

2. We Bring Design/Creative Expertise

When it comes to the design of your next direct marketing program, our design experts are at your service. Whether it’s building an entire campaign from scratch to helping with new, efficient format ideas, we bring an unsurpassed level of creative expertise to your direct marketing projects. We can help with design, copywriting, personalization, versioning, best practices, and more! Here are some examples of things we’d likely cover in a design/creative review:

  • Understanding your audience
  • Understanding what’s worked and hasn’t in the past
  • What is the action you want the recipient to take?
  • Reviewing the developed creative brief
  • Offer and supporting benefits development
  • Optimal design and content placement
  • Copy that engages, makes an emotional connection, and prompts action
  • Accommodating differences in how readers consume content
  • Communicating your unique selling proposition

3. We Can Help with Your Data, Targeting, and Analytics

Whether you are a seasoned direct marketer or are just getting started, our team can help with your data and targeting strategies. From list research in identifying your best target audience to predictive modeling tools, we love to help our customers with their data/targeting strategies. Topics surrounding data and targeting would include items such as:

  • Understanding your target market
  • Reviewing current and introducing potential new sources of data
  • Leveraging sophisticated analytics to boost response, cut costs, and lower cost of acquisition
  • Understanding your current CRM strategy and how we can enhance it
  • Leveraging your customer and prospect data to further enhance personalization

4. We Bring Analysis Experience

Once the mailing gets to the recipient, our team is equipped to step in to help you analyze results of your direct marketing campaigns. Examples of items we’d analyze include:

  • KPIs and what they tell us
  • What can be learn from what worked and what didn’t
  • Go-forward testing recommendations

5. We Take What’s Working (or Not!) and Build Upon It

The best part of working together is that you will realize . . .

Request a Quote

Are you interested in learning more about our direct marketing service offerings? Reach out and contact us today!

Bio: Melissa Fransen is our Marketing Manager. She started with Nahan in May of 2017. Melissa is responsible for Nahan’s marketing initiatives, which includes everything from conference planning to social media initiatives. In her spare time, Melissa enjoys spending time with her husband and enjoying time in the outdoors with family and friends.

Looking for a Unique Take on Direct Mail? Try the Peek Fold Format!

Posted on by Bryan.Formhals

Author: Laura Karels, Lead Designer

Check out our spin on a traditional direct mail format with the peek fold format. You’ll grab your recipient’s attention with a personalized headline as the first thing they see when they pull this peek folded letter out of the envelope. The longer form allows for a traditional letter using direct mail best practices along with extra real estate for a branded or promotional panel.

  • Unique folded letter peeks a large headline at the top
  • 14” long form for additional real estate
  • Tip on card for a tactile feel
  • 6” x 9” envelope stands out in the mailbox
  • Options: Fold style can be incorporated on other size formats

Watch the short video below to see the peek fold format in action!

For more inspiration, check out our other format ideas, including a double gate mailer, iron cross mailer, and 5 panel rollfold mailer.

Bio: Laura Karels is our Lead Designer. She is responsible for all things direct marketing design—from format sketches to final art—and truly enjoys the creative process of helping clients develop winning direct marketing campaigns. In her spare time, Laura enjoys great coffee and cross-country road trips with her family. She’s also getting really good at finding humor in her husband bringing home yet another “project” vehicle.

How To Build an Effective Direct Marketing Strategy

Posted on by Bryan.Formhals

Author: Alan Sherman, VP of Marketing Strategy

How many times have we in business or marketing heard the word “strategy?” or “strategic?” or “strategic direction?”  It’s one of those common business buzzwords that we hear all the time, but when it comes to direct marketing, what does “strategy” really mean? Merriam-Webster offers up several definitions of “strategy,” but the one I think is most relevant to direct marketing is “The art of devising or employing plans towards a goal.” After all, successful direct marketing strategy requires effective planning – putting the components of a winning program together.

From Our Perspective, What is Strategy?  

Nahan provides Strategic Planning, which is most simply about enabling clients to achieve their direct marketing goals.  This means improving direct mail gross response, while lowering cost without corresponding drops in response. This can be a challenge, as adding package components, increasing package size or paper quality will often lift response, but add cost. Ultimately, improving upon both response and cost leads to an improved cost per acquisition and superior return on marketing investment. So how do we do this?

A Step by Step, Rigorous Approach Gets Results

We recommend initially approaching this from a macro level. Who will we target and why? If we are focusing on direct mail, what kind of package format is needed? What does our creative and messaging need to look like? What are our target metrics?

The answers to these questions can be found in a step-by-step approach to direct marketing performance improvement. We suggest beginning with a marketing assessment to best understand everything that has been done in the past, from creative, targeting, cadence and offers to the competitive landscape.

Based on our knowledge of data and analytics and an analysis of the marketer’s data, we will likely propose specific types of data and the right predictive analytic tools for data testing. On the creative side, although budget is usually a factor, when we can test more than one creative, we create more opportunities for success.

Finally, based on what we see in the data and from our knowledge of direct mail creative best practices, we design the creative, with the target audience in mind. The data analysis tells us quite a bit about our prospects. We develop messaging, the package design, articulate the offer, supporting benefits and Call to Action.

How Strategy is Rolled Out Against Data, Analytics, and Creative

The available universe is determined. Because we take a “test and learn” approach, a test plan that minimizes risk while testing creative, data, and analytics is developed. When results come back, we measure them and make recommendations for further improvements in targeting and creative. Feeling more comfortable in what works, we can invest more dollars in reaching more people, often expanding to an omnichannel campaign, particularly where we can simultaneously target the same direct mail recipients with online campaigns, can substantially lift results further.

A subsequent results analysis leads to additional improvement – ideally, a never-ending improvement process. Which is necessary, given that costs like paper and postage are always rising!

The Results

We can almost always improve response through our knowledge of what creative and data works, creative and data testing, and predictive analytics. We can also test less expensive materials to bring down package costs. When we work these “levers” in the right way, cost per acquisition drops.

Questions To Ask Yourself and Your Team

What are your acquisition goals for the year? Where do you think your program is working and where might improvement be needed? Are you testing creative and data on a regular basis? Do you rotate your creative to keep it fresh and performance up? If you would like to achieve better results or simply discuss your challenges and receive suggestions, give us a call.

Bio: Alan Sherman is our Vice President of Marketing Strategy. Alan enhances Nahan’s current value proposition with strategy solutions that support new/existing client relationships. For clients, he leverages market, customer, and competitive intelligence to build achievable strategies for omnichannel marketing success. His marketing plan strategies include targeted data, predictive analytics, testing and creative that drive ongoing client performance improvement. In his spare time, Alan enjoys spending time with his family, traveling, going to concerts, watching sports (he’s a fan of the NY Giants, Boston Red Sox and Celtics) and walking the dog, even though it was just out.

Direct Mail Design Best Practices: Personalization Matters

Posted on by Bryan.Formhals

Author: Laura Karels, Lead Designer

Designers of all mediums have best practices they follow when creating their best product and direct mail designers are no different. One of the most important best practices in direct mail design is using personalization and using it well.

Direct mail personalization has come a long way from just using the recipient’s name and address. Digital print technology and highly targeted data has allowed marketers to personalize direct mail design in creative ways. Personalization is proven to drive better response rates and who doesn’t want that?!  

Ways to get personal…

Imagery

Images can be personalized based on segmentation data, business vertical type, location, and more. Visuals the recipient can relate to can be very powerful.

Offers

Targeting offers to a recipient’s consumer history or specific needs are more likely to get response from your direct mail. Response rates can increase up to 50% or more when targeting consumers on a 1:1 level. (thedma.org)

Geo-Targeting

One of the easiest ways to personalize and get impact is the use of maps and locations within the direct mail design and copy. This is also information that is part of the basic data—it can simply be pulled from the address block.  

Copy

The words you use can be personalized in so many ways. Using the recipient’s name, address, consumer history, business type, etc. in thoughtful ways within the copy can entice the reader and increase response. According to the ANA (formerly DMA) simply adding a person’s name can increase response by 135%!

Forms

If your direct mail format includes a form or response device, prefill out the form with the recipient’s data to make responding easier.

These are just 5 ways to use personalization within direct mail design but digital print technology has opened the door to so much more.

Check out this example of a mailer that was designed to contain 57 variable pieces of data and photos, resulting in increased engagement and a higher ROI per piece vs. previous direct mailers! Contact Us to see how we can help you effectively use personalization in your next mailing.

This is part of our Design Best Practices Blog Series. Look for more best practices in future blog posts.

BIO: Laura Karels is our Lead Designer. She is responsible for all things direct marketing design—from format sketches to final art—and truly enjoys the creative process of helping clients develop winning direct marketing campaigns. In her spare time, Laura enjoys great coffee and cross-country road trips with her family. She’s also getting really good at finding humor in her husband bringing home yet another “project” vehicle.

Build a Dynamic Plan for Direct Mail

Posted on by Aaron.Weeks

Are you familiar with the 40/40/20 rule of direct marketing? It states 40% of your campaign’s success is the result of list selection, 40% is because of your offer and 20% is based on creative. But what does that mean, exactly? Let’s break it down with some quick tips you’ll want to keep in mind for your next campaign.

Know Who You’re Talking To

Owning the right list is vital whether you’re trying to grow your audience, communicate with current customers or reach prospects you already know. Knowing your market allows you to nail down the tactics. You don’t talk to car salesman the same say you speak to the neighbor kid at her lemonade stand, so why waste words with a blanket message? Secure engagement and responses by tailoring your advert to interests, location and purchase history.

Seal the Deal

Now that you know your audience, it’s time to reel them in with a killer call to action. The second 40% is all about getting the reader to do something. Which sounds obvious, but you’d be shocked by how many mailers don’t inspire clear action. Do you want them to complete a survey? How about redeem a coupon? Lead the reader towards your goal with action verbs and explicit, easy-to-follow instructions. Don’t waste time and money on bland, generic messaging.

Get Creative

Creative may only be 20% of the rule, but it’s the cherry on top of your ROI-driving sundae. Think outside the box to boost your open rates and catch scanning eyes. One tip: make your mail lumpy. Including any item thicker than the envelope it comes in piques the reader’s interest and turns your ad into a prize. After all, who doesn’t love getting a gift? Find out more about effective creative on our blog about direct mail personalization.

See some examples of the 40/40/20 rule in action on our work samples page. Can you pick out the audience? Is the call to action clear? Are you attracted to the creative? Put these rules into practice and you’ll be a direct mail master in no time. Check out our marketing services page for more on how we can help you get started.